The start of a year is a logical time to set financial goals, be it cutting back on unnecessary spending, saving more for the future or improving the performance of an investment portfolio.
Whatever the goals, most people are heading into the final months of the millennium in a positive mindset.
One recent poll by Lutheran Brotherhood, a financial services company in Minneapolis, found 52 percent of Americans think they'll be better off in 1999; only 20 percent feel they'll be worse off. Nearly half predict incomes will rise, while 62 percent believe the economy will remain stable or improve.
``Even with the recent volatility in the stock market, many people are expecting 1999 to be a prosperous year,'' notes Les Bendtsen, Lutheran Brotherhood's manager of investment relations.
To make that a reality, financial experts are once again offering a magnitude of advice for the new year. Much has been said before, though for most people it's worth repeating since it involves breaking stubborn habits of years past.
A few financial resolutions for 1999:
-- Save more.
1998 was a dismal year. Americans set aside less than 1 percent of disposable income during the first three quarters, and the national savings rate actually dipped into negative territory in September and October.
The amount that should be set aside depends on age, income and debt load.
Some financial advisers think the average household should save around 10 percent of gross income. Others like to see at least three months' salary placed in a cash reserve for emergency expenses.
-- Contribute to retirement.
If you're not participating in an employer-sponsored savings plan, like a 401(k), start now, or increase the contributions. The advantages: Taxes are lowered and a tidy nest egg is built.
Remember, 401(k) contributions come from pretax dollars, and earnings on them are tax-deferred. Often times, employers match contributions.
If no plan is offered, or even if one is, consider an Individual Retirement Account as well. For certain people, contributions are tax deductible, but even if they're not, there are many advantages to having one. Roth IRA contributors, for instance, may qualify for tax- and penalty-free withdrawals long before they retire.
-- Review your investment portfolio.
Wall Street's volatility left some people rethinking their strategies. But experts stress that investing requires patience and discipline, and most individuals should be in it for the long haul.
You may need to shift out of certain investments periodically. You can't, for example, leave money in consistently underperforming stocks or funds and forget about it. Rules of thumb: Diversify and allocate assets according to risk level.
-- Cut expenses.
The best way to save and invest more is to spend less.
A budget is crucial. While preparing one, seek input from family members on ways to cut costs, then use a financial software program to crunch the numbers.
There are countless ways to cut back; some can be innovative.
``Brewing your morning coffee at home instead of buying it on the way to work could easily save $300 a year. Making a few phone calls to price shop for car insurance could net you another $400,'' says Mark Eisenson, coauthor of ``Invest in Yourself: Six Secrets to a Rich Life.''
-- Lower debt.
Americans are $6 trillion in the hole from credit cards, mortgages and other loans.
Take advantage of low interest rates to refinance your mortgage and trim monthly housing payments. Pay off credit card balances.
The longer card payments drag on, the higher the debt becomes. A $1,200 tab charged at 17 percent interest takes nearly 20 years to pay off and costs around $2,000 in interest if only minimum payments are made.
If you're having trouble paying bills, get help. The Consumer Credit Counseling Services in Silver Spring, Md., has offices nationwide and charges only a nominal fee for its services.
-- Do estate planning.
If you haven't drawn up a will or a trust, do so now.
A good estate planner can set one up and discuss important issues like dividing property, designating beneficiaries or powers of attorney, with an eye toward taxes.
-- Get organized.
Gather important financial and legal documents. Some papers, like old bank statements or check stubs, can be tossed; others, like insurance policies or tax returns, can't.
Develop a system for monitoring savings, investments and bill paying. Here, too, some of the current financial software can help.
Citibank offers a free workbook, ``Getting Financially Organized - Money Minder Worksheets.'' Call (800) 669-2635.
-- Understand personal finance.
There's plenty of information available through books, magazines, newspapers, newsletters and on the Internet.
They offer investment and tax advice, keep you abreast of legislative changes and keep track of important dates during this new year.
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